Hanger Orthopedic Group, Inc. Exceeds Estimates on a 10% Sales Increase and a 28% EPS Increase to $0.23 for the Third Qu...( BETHESDA Md. Oct. 27 /- Hanger Or...),Health

BETHESDA, Md., Oct. 27 /PRNewswire-FirstCall/ -- Hanger Orthopedic Group, Inc. (NYSE: HGR) announces net sales of $178.7 million for the quarter ended September 30, 2008, an increase of $16.4 million, or 10.1%, from $162.3 million in the prior year's comparable quarter. Net income for the quarter was $7.3 million, an increase of $1.9 million, or 35.7%, compared to the same quarter last year. Diluted earnings per share for the third quarter 2008 were $0.23 per share, or 27.8%, from $0.18 per share in the third quarter of last year.

The $16.4 million sales increase for the quarter was primarily the result of a $10.5 million, or 7.3%, increase in same-center sales in our patient care business, a $2.9 million, or 15.9%, increase in sales of the Company's distribution segment, and a $2.8 million increase related to acquired entities. Gross profit for the quarter increased by $8.7 million to $91.1 million, or 51.0% of net sales, compared to $82.4 million, or 50.7% of net sales, in the third quarter of 2007. The increase in gross margin was due to reduced material costs.

Income from operations in the third quarter of 2008 increased by $1.7 million, or 9.0%, to $20.2 million compared to the same period of the prior year, principally due to the aforementioned increase in gross profit. Selling, general and administrative expenses increased $6.7 million as a result of a $2.2 million of increase in personnel costs which includes $0.8 million of merit increases, a $1.6 million increase in variable compensation accruals, $1.2 million of higher health care costs, a $1.0 million increase related to acquisitions, a $0.6 million increase in occupancy expenses and $0.8 million of bad debt expense, offset by a $0.7 million decrease in other over
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